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Exclusion ofWarranties, Privity,and Duty to NotifyExclusion of WarrantiesTo exclude the warranty of merchantability, the word merchantabilitymust be mentioned specifically. If the exclusion is in writing, the wordmust be written prominently. The warranty of title may not be excluded.Example 11. Purvis bought a used car from Best Motors. Printedon the sales slip were the following words in large, bold capital letters:“THE SELLER HEREBY EXCLUDES THE WARRANTY OFMERCHANTABILITY AND FITNESS FOR A PARTICULAR PUR-POSE.” The car broke down two days later, but Purvis had no recourseagainst the car dealer for breach of either implied warranty.Implied warranties can also be excluded by the words “as is” and“with all faults.” Having buyers examine goods before the sale is anotherway to exclude warranties. When this is done, there is no implied warrantyto cover defects because the examination should have revealedany defects in the goods.Example 12. Teresa Quigley paid cash for a computer desk shebought from a retail furniture dealer. The sales tag attached tothe desk read: “Reduced from $198 to $75, sale final, with allfaults.” When the desk was delivered to Teresa’s home, she foundthat the drawers stuck and that one side was badly marked andscratched. Despite these flaws, Teresa would have no recourse inmany states because of the terms of the sale. The sales tag madeclear that Teresa assumed all risk as to quality. She is protectedonly by an implied warranty of title.Under the Magnuson-Moss Warranty Act, any clause that excludesor limits consequential damages for breach of warranty must appearconspicuously on the face of the warranty. Consequential damagesare losses that do not flow directly from an act but only from some ofthe consequences or results of the act.l How to recognize waysthat warranties areexcluded (not in force)l How to determinewho is covered bywarranties madeunder the laws ofyour statel How to explain thebuyer’s duty to notifythe seller of a defectKnowing how warrantiesare excluded, to whomwarranties are made, andnotification requirementswill help you protect yourrights and the money youspend.l consequentialdamagesl privity of contractl duty to notifyExample 13. Souci bought a freezer that was warranted for oneyear. This sentence appeared in boldfaced type on the writtenChapter 14: The Importance of Warranties 305